Revolutionizing Healthcare: Could Subscription Models Boost Innovation?

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The traditional reimbursement system in healthcare can hinder valuable innovations. Introducing subscription models akin to Netflix could reshape access to drugs and treatments, a strategy already in motion in countries like the UK, Australia, and Sweden.

Consider antibiotics. Despite their life-saving potential, developing new antibiotics isn’t lucrative. They face competition from low-cost generics and undervaluation by patients and health plans. This leads pharmaceutical companies to shy away from their development, resulting in a scarce pipeline for potential new antibiotics.

The Pasteur Act, proposed in the US, aims to foster new antibiotics through a subscription model. Such models could revolutionize healthcare by encouraging innovations like gene therapies, especially those with high price tags.

To make subscription models effective:

  1. Define Purpose: Trust is key. One model safeguards valuable options for the future, while the other grants access to expensive treatments. Building trust is crucial for government, payers, and providers.
  2. Negotiate Wisely: A two-part tariff strategy, comprising a subscription fee and per-unit charge, can be advantageous. However, negotiating fees is challenging as they dictate the value split between innovators and consumers. Establishing fair principles beforehand can ease negotiations.
  3. Align with Norms: Acceptance hinges on alignment with ethical norms. Healthcare innovations that seem to prioritize financial gain over ethical duties often face opposition. Models like Louisiana’s, ensuring access to life-saving medications for those unable to afford them, receive praise for reducing health inequality.

In summary, successful subscription models in healthcare rely on trust-building, fair negotiations, and alignment with ethical healthcare norms to drive innovation and improve access to crucial treatments.


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